Spot Bitcoin ETF approval is anticipated by early January 2024 despite recent proposal amendments and SEC’s cash-only requirement compliance.
The buzz around the expected approval of a spot Bitcoin ETF in the United States is gaining momentum. The start of 2024 could mark a significant milestone with analysts predicting the U.S. Securities and Exchange Commission’s (SEC) green light for these much-awaited investment vehicles. This development comes amidst a flurry of amendments and compliance efforts by ETF applicants.
In the closing month of 2023, entities vying for spot Bitcoin exchange-traded funds (ETFs) hurried to integrate new cash-only requirements into their proposals. This rush reflects the industry’s commitment to aligning with regulatory frameworks and enhancing the legitimacy of cryptocurrency as a mainstream asset class.
Analysts James Seyffart and Eric Balchunas from Bloomberg have been at the forefront of this discussion. They project that despite numerous last-minute proposal tweaks, the SEC is likely to approve a spot Bitcoin ETF as early as January 2024. Their analysis presents an optimistic outlook for the crypto market, anticipating a positive response from the regulatory body.
Recent Developments and Compliance Efforts
A focal point in this ongoing process is BlackRock’s latest update to its iShares Bitcoin Trust ETF application. On December 18, BlackRock adapted its proposal to the SEC’s preference for a cash redemption system. This move is a shift from the earlier in-kind redemption approach, which involved non-monetary exchanges like Bitcoin. BlackRock’s adjustment in terminology, from “prime broker and trade credit lender” to “prime execution agent,” has drawn particular attention. This change could indicate efforts to align more closely with SEC guidelines, although there are speculations about the commission’s comfort level with this new phrasing.
Other applicants like ARK, Bitwise, and Valkyrie have also embraced the cash-only model, demonstrating a proactive stance in adhering to regulatory expectations. However, some, including Grayscale and WisdomTree, are yet to make this transition in their filings.
Seyffart highlights that this dynamic landscape suggests an imminent approval by January 10, 2024. He notes that this timeline might leave some issuers behind, especially those who have not fully embraced the SEC’s cash-only model. The unfolding scenario points to a selective process, where only those complying with the latest requirements might see their applications succeed.
Balchunas echoes Seyffart’s sentiment, noting the ongoing dialogues between the SEC and various ETF filers. These interactions, though not collective, signify the SEC’s active engagement with each applicant to reinforce the necessity of cash-based creations for the ETFs. This approach underscores the SEC’s commitment to ensuring that the emerging spot Bitcoin ETFs meet stringent regulatory standards, promoting investor protection and market integrity.